Friday, May 24, 2024

Legal Marijuana Handed A Nothing Burger From NY State

Following the chaos of the recreational weed rollout, the government is trying to figure out next steps. But it seems legal marijuana has been handed a nothing burger from NY state with their last rollout for potential cannabis retailers.. With an estimated $3.5 billion in sales at stake along with tax revenue for the state’s every growing budget, the fumble is costly for a significant number of players.  And it has been a huge loss for the marijuana industry as a whole.

What was quickly seen as an opportunity was pounced on in the city with the most billionaires globally along with endless big and small entrepreneurs, and hustlers. Seeing a huge amount of cash on the table, players acted in a quickly in a way bureaucrats will never understand.

Vape Sales Showing Signs Of Recovery From Crisis
Photo by Jamie Grill/Getty Images

Embracing a Wild West approach, officials decriminalizated and fumbled licensed legalization of sales.  Despite promises and initial outlines where existing medical marijuana dispensaries could switch to recreational and a fair, for government quick liscnese process, the state tossed it all in one stroke. In a vision of equity, officials decided to reserve the first retail licenses for felons and other “justice-involved” individuals.  Lawsuits started, the desired licensees struggled to raise capital and over 1,600 unlicensed retail stores opened in NYC. For the small time players, they have set sidewalk card tables parks, selling roll-ups and handmade marijuana edibles, in full view of the police.

The updated systems was rolled out, but has left people confused, dispirited, and disappointed. The Office of Cannabis Management rolled out the previous Conditional Adult-Use Retail Dispensaries (CAURD) program with high hopes.  Now, regulators voted to allow the state’s medical marijuana operators to apply for adult-use retail licenses.  Multistate operators who have patiently acquired a majority of the state’s 10 registered organization.

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“It was more like an orgy of minimalism. While they are getting ready to open the application window on October 4th (notably, originally it wasn’t intended to be a 60-day window, but rolling applications) for most license types (sans on-site consumption and delivery), they refused to address the CAURD program.  Other than to suggest that it remains “a priority”, they have offered only some subtle hints in the guidance to the regulations. These include establishing a priority for retail applications which include secured real estate, which will be given priority after the initial 30-days of the 60-day application window have passed (although they do not define what that means).  And noting that existing licensees may apply for an additional license so long as they comply with the rules of a two-tier system.  The positive news is that these statements can be interpreted as an invitation to current CAURD licensees, many of whom will also meet other Social and Economic Equity (SEE) criteria entitling them to an additional priority.” shares Andrew Cooper, partner at Falcon Rappaport & Berkman LLP, one of the top cannabis law firms.

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Photo by 955169 via Pixabay

Unfortunately, there are multiple losers in the state’s unique approach.  One is consumer and medical marijuana patients, including veterans.  The unlicensed dispensaries are making a mint and overcharging customers due to high demand. Small investors and companies, including those who could be a player in the CAURD, will not have the financial to compete with multi-state and large players. And taxpayers will lose out for years to come as revue it lost to unlicensed dispensaries.

The good news, consumers will continue to find products easily over the next few years.  There is even a thriving unlicensed dispensary a few blocks from City Hall.

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While New York is awash with billionaires, fashion, food and smarts, common sense seems to be lack for making a good government plan.

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